So you want to open a LFS...

[ca1ore]

My standard advice to anyone thinking about starting a LFS (or any business catering to a niche hobby) is to 'lie down until the feeling goes away'. Nothing quite like adding a commercial element to a hobby to suck all the fun out of said hobby. Tried it with two of my hobbies years ago. Can you spell ....... TEDIOUS (and generally unprofitable, even with my Ivy League business degree :lol. Plus, my time honored approach to customer service is to tell people to 'stop complaining'.

 

[sk8ter20art]

Bieng a new store owner we basically set out to do what the OP had posted. While our area had 3 stores that carry saltwater, it was not the main focus because they were all around pet stores that focused on dog grooming. Many had dirty tanks, sick fish, or poor selection of dry goods/equipment. We will have been open for a year this october. We decided to open because the local stores were dropping the ball on quality and the good stores were 2hrs away in atlanta (which turns into a whole day trip). We also wanted to share our hobby with many more people and lead them down the right path to having a successful saltwater aquarium.

Yes livestock is where the small shops thrive and have the best profit margin. To maximize this we QT all new fish for 2 weeks in our qt system and treat for anything we spot with proper meds before putting out for sale. All special order fish are held 1 week in qt, if the customer doesnt want to wait them they can get the fish but no garuntee. This time gives the fish time to recover from shipping and we have time to observe them.

Since we have opened we have increased our livestock display tanks to accomidate more fish, and more sizes. A lot of our customers base are first timers so not too much on new tank sales. A lot of our customers get tanks off craigslist or from reef forums. We are slowly building our market one tank at a time. Our customers have been to the other stores and even though they are new to the hobby they can tell the difference in quality. We also keep a wish/want list running of what our customers are looking for/wanting in livestock and corals. Sometimes certain items are not always available, but we call that person when we can get a hold of that item.

What irks me the most is people who shop online, instead of with me. I can get most all the name brand products if you ask. But i get people that say "oh i can get that on amazon by tomorrow ". I am here to provide more than just products, we give tons of free advice, recommendations based on our knowledge of what you already have, got an emergency, we are here amazon/etc is not.

I dont have a problem with people ordering online if you have no lfs available. I think what this hobby really needs is more support for the real LFS. This is not a hobby that scales up to large corp scale very well, we all know that from visiting any petco. If we dont support the mom and pop LFS we will end up with No great LFS.

Some companies say they do MAP pricing which is Minimum Advertised Price. This pricing is supposed to help protect the smaller store's. Well i know from first hand this isnt always the case. Marinedepot.com was selling an item for $100 less than MAP and offering free shipping. I cant even order it for what they are letting them sell it for and they have done nothing to make them correct it.

BUY LOCAL AND SUPPORT THE WORTHY FISH STORES IN YOUR AREA. If you dont see it in the store ask for it, there are so many brands/models the little stores cant carry them all in stock all the time.

Ok rant over.

Www.facebook.com/simplysaltaquatics

 

[rwb500]

Bieng a new store owner....


BUY LOCAL AND SUPPORT THE WORTHY FISH STORES IN YOUR AREA.

........

Www.facebook.com/simplysaltaquatics

would you agree that you are somewhat biased on the subject?

 

[that Fish Guy]

Bieng a new store owner we basically set out to do what the OP had posted. While our area had 3 stores that carry saltwater, it was not the main focus because they were all around pet stores that focused on dog grooming. Many had dirty tanks, sick fish, or poor selection of dry goods/equipment. We will have been open for a year this october. We decided to open because the local stores were dropping the ball on quality and the good stores were 2hrs away in atlanta (which turns into a whole day trip). We also wanted to share our hobby with many more people and lead them down the right path to having a successful saltwater aquarium.

Yes livestock is where the small shops thrive and have the best profit margin. To maximize this we QT all new fish for 2 weeks in our qt system and treat for anything we spot with proper meds before putting out for sale. All special order fish are held 1 week in qt, if the customer doesnt want to wait them they can get the fish but no garuntee. This time gives the fish time to recover from shipping and we have time to observe them.

Since we have opened we have increased our livestock display tanks to accomidate more fish, and more sizes. A lot of our customers base are first timers so not too much on new tank sales. A lot of our customers get tanks off craigslist or from reef forums. We are slowly building our market one tank at a time. Our customers have been to the other stores and even though they are new to the hobby they can tell the difference in quality. We also keep a wish/want list running of what our customers are looking for/wanting in livestock and corals. Sometimes certain items are not always available, but we call that person when we can get a hold of that item.

What irks me the most is people who shop online, instead of with me. I can get most all the name brand products if you ask. But i get people that say "oh i can get that on amazon by tomorrow ". I am here to provide more than just products, we give tons of free advice, recommendations based on our knowledge of what you already have, got an emergency, we are here amazon/etc is not.

I dont have a problem with people ordering online if you have no lfs available. I think what this hobby really needs is more support for the real LFS. This is not a hobby that scales up to large corp scale very well, we all know that from visiting any petco. If we dont support the mom and pop LFS we will end up with No great LFS.

Some companies say they do MAP pricing which is Minimum Advertised Price. This pricing is supposed to help protect the smaller store's. Well i know from first hand this isnt always the case. Marinedepot.com was selling an item for $100 less than MAP and offering free shipping. I cant even order it for what they are letting them sell it for and they have done nothing to make them correct it.

BUY LOCAL AND SUPPORT THE WORTHY FISH STORES IN YOUR AREA. If you dont see it in the store ask for it, there are so many brands/models the little stores cant carry them all in stock all the time.

Ok rant over.

Www.facebook.com/simplysaltaquatics

I agree with what you say but unfortunatly all most people care about is price.

They do not see the whole picture (All the advice and services you provide as well as the fact that you may not be around in the future due to them buying online) All they see are the Dollar Signs.

I was once at a store and a guy was crying that he was going to loose thousands of dollars in fish from Ich.

The store recommended something.

He immediatly pulled out his phone and said it is cheaper online (like 3.00 cheaper).

So to save 3.00 he lost all his fish and then complained to the store that he lost money because he bought a product online (Medication) that he had no use for since by the time it arrived he had no fish alive.

Seriously that is how a lot of people are these days - It drives me nuts!

If it is cheaper online they will shop online.

You would think that they would have the common decency to say "I'll think about it" instead of "It is cheaper on Amazon"

But that is not the world we live in and it is only going to get worse since more and more people become tech savy every day.

In regards to the Marine Depot Discount usually when MAP Products get discounted (Ecotech, Kessil, etc.) the company offers you a discount too so you do not loose any money.

Next time something goes on sale see how much your wholesaler is selling it to you for (It should be discounted) (And you might even have a higher profit margin too - 100 off to customer but 120 off your cost).


P.S. Your store looks immaculate!

I have never seen a fish store like that.

 

[that Fish Guy]

would you agree that you are somewhat biased on the subject?

Biased?

Well yes he is the store owner.

But he speaks the truth.

And he is being logical and reasonable.

 

[sk8ter20art]

I agree with what you say but unfortunatly all most people care about is price.

They do not see the whole picture (All the advice and services you provide as well as the fact that you may not be around in the future due to them buying online) All they see are the Dollar Signs.

I was once at a store and a guy was crying that he was going to loose thousands of dollars in fish from Ich.

The store recommended something.

He immediatly pulled out his phone and said it is cheaper online (like 3.00 cheaper).

So to save 3.00 he lost all his fish and then complained to the store that he lost money because he bought a product online (Medication) that he had no use for since by the time it arrived he had no fish alive.

Seriously that is how a lot of people are these days - It drives me nuts!

If it is cheaper online they will shop online.

You would think that they would have the common decency to say "I'll think about it" instead of "It is cheaper on Amazon"

But that is not the world we live in and it is only going to get worse since more and more people become tech savy every day.

In regards to the Marine Depot Discount usually when MAP Products get discounted (Ecotech, Kessil, etc.) the company offers you a discount too so you do not loose any money.

Next time something goes on sale see how much your wholesaler is selling it to you for (It should be discounted) (And you might even have a higher profit margin too - 100 off to customer but 120 off your cost).


P.S. Your store looks immaculate!

I have never seen a fish store like that.

Thanks.

The markup of equipment really sucks, most products under MAP are only 20-30% markup and that doesnt factor in shipping charges.

Some brands offer bulk deals, if you spend more $$$$ then you get a price break on each item. This type of thing sucks for us little guys, sitting on inventory with such little markup to begin with and such high bars for price breaks.

AquaVitro so far is the only company i know of that does not allow there products to be sold online. They want to help the LFS and i think more brands need to follow, even if its just some of there product line.

I understand saving a buck these days, but I am trying to be a swlf sufficient american, im not a big corporate ceo trying to decide if i should get my bugatti in red or black


And Rwb500 i did say worthy LFS, if you dont believe my store is worthy then thats your opinion. You would not believe the nigntmare stories i have heard from my customers about what the other store told or did to them.

Some stores promote using fish to cycle tanks to make a few extra bucks. I choose to promote fishless and even give them the shrimp to start for free. One store keeps selling people with brand new tanks mandarins, and of course i have to tell the customers the real reason it died. One store was badmouthing us so bad people were coming to my store to see if what they said was true, but when they arrived it was the opposite.

Prime example of one of my competitors.
Sold a business a used 90g tank, stand, t5 light, 10gal sump (no baffles) for 1500 + $500 in fish. The tank crashed in 2 weeks, never came back. We were contacted by the business to take over services. No filtration of any kind on the system. The really sad part is they are in the same strip mall no more than 500ft away. They took the money and ran. I dont know all the details as to weather it was disease, fighting, or no filtration/water changes.

 

[sk8ter20art]

While I'm sure I know the least of anyone involved in this discussion about the business (and maybe the hobby too), I think two things are critical to LFS success: 1) service accounts; and 2) new hobbyists. Service accounts are critical because there is no competition from on-line sellers. New hobbyists will generally pay at least somewhat of a premium for the 'knowledge' (some real and some imagined) of the people at the store and have empty tanks to fill (often several times as they repeatedly kill their livestock). Experienced hobbyists, on the other hand, have mostly full tanks and are not killing their stuff making room for new stuff. They also know every LFS within at least a hundred miles and every on-line retailer so their few purchases are spread out.

While we, as experienced hobbyists maintaining our own tanks, would like to think we're critical to our LFS's success, we may be the least critical demographic to their success.

At the core of it, I don't think many will make a lot of money running a LFS so the only reason to get in the business may be a love of the hobby but, it may be difficult to preserve that love while owning/operating a store. Don't get me wrong, I've seen some great LFS but I shudder to think of the hourly wages of the owners and employees alike.


Matt

Yes, service accounts are key, but they can come as a risk as well. New to the hobby customers are key to success. A person with there 1st tank is going to buy more stuff than somebody that has been in the hobby for years. But on the same note you need to match your livestock to your customers. I am not going to order big ticket fish in my store because i know my local customers are not going to fork over that kind of money on a whim. You have to order what sells and order what people are asking for. My new customers range from 30-75gal, my veterans range from 90-250gal.

This hobby is so big that nobody knows everything there is to know, so if i dont know the answer i will tell them so, or that i need to do a little homework and will get back with them. Id rather tell somebody i dont know, than to give some some bs and ruin my reputation


A successful business will do 2 things
1. Do something different
2. And do it better than competitors.

 

[Pittsburgh]

I've been in this hobby for a long time now. So this perspective comes from a seasoned hobbyist, someone who may not be the ideal target market for an LFS.

I do buy from several local LFS, primarily lifestock and in case of emergencies. But I also buy online, a lot...

Every LFS/business has to worry about their budget, but I also have my family budget that needs to be balanced. And since I'm not exactly swimming in cash, I have to make decisions that are the most cost effective for my budget. This means that all equipment, supplements, dry food and salt in most cases gets bought online. In the order of importance, from top to bottom, my three main reasons to buy online are:

- Convenience of comparison shopping to ensure lowest price
- Item availability and highly predictable ETA
- Delivery to my door

On several occasions, my LFS had salt mixes on sale lower or the same price as online, but a round trip just was not worth the savings. I also minimize emergencies by planning ahead and stocking up on consumables. After all, emergencies also happen when the LFS is closed.

For all of this, I found that online works best for me.

What I want to see and buy at the LFS is healthy livestock. Namely fish and corals.
I understand perfectly well, that an LFS needs to charge more to simply keep the lights on and I cannot blame them for that. I also understand that me buying a $20 frag or a $30 fish every once in a great while is not going to help keep the LFS running. But this is where I stand.

 

[Pastey]

I buy most of my dry goods online. Simply put, dry goods are more of hassle. Salt, food, kalk, etc. These are things I buy when I need. Of course, we'd all rather spend money on livestock and new equipment but we also need that other stuff. When I need dry goods, I don't want the hassle of driving somewhere to get something I don't really feel like spending money on in the first place. I want to order it, have it arrive and be done with it. Online buying is a two-fold solution: you get it cheaper and you get it relatively quickly without having to spend much of your time.

However, when it comes to livestock, I whole-heartedly prefer shopping at a decent LFS. I like to support my LFS. I like to WITNESS the fish/coral/environment before purchase. Is the fish skinny? Showing signs of HLLE/ich/etc? Swimming behavior? Is it aggressive to tankmates? These are all things you can not do online...even WYSIWYG is just a picture.Corals...same story. Is it open and healthy? Is skeleton showing? Pests on the plug? Surrounding corals look healthy?

For these reasons, I rarely shop online for livestock. I've never purchased corals online. I purchased one fish online from DD and while it was a very smooth deal with healthy arrival, I disliked the process as a whole.

 

[sk8ter20art]

I totally understand ease of ordering online. Depending on your location it may be easier, I opened my shop because if i had to go to atlanta every time i needed something i would end up spending the whole day just to go get that item (1.5-2hr drive one way). I will shop for stuff online, but i like to be hands on with stuff too. Reviews can be helpfull on making choices, sometimes they can be of no help depending on the reviewer (fake review).


I know from a previous business my family owned that its not the people who come once in a while or rarely make purchases that keep the doors open. Its the people that come in often. I have a large backroom at my shop and just set up a huge growout system, 10ft x 4ft x 12in 200gal approx. I built just about everything in by shop, stands/tank drilling /plumbing/acrylic to have the systems i run. I am doing everything i can to drive my own costs down, and offer stuff the online community/big box stores cant offer.

I know im not going to convince everyone but if you have the option DO support your lfs that are making an effort. I appreciate every customer i have and do my best to offer great customer service. I know most of my customers by name, and i love seeing all of there tanks grow. I also love DIY projects and take notes on everything new i see. So i get to make new stuff all the time, for store use or even for sale.

I didnt open my store to get rich quick, i did it because i love this hobby, i hate it when i lose fish, makes me ill when i hear what another store local/online has done badly, prefer to not sell a fish to someone who i know doesn't have an appropriate tank for said fish (ex. queen angel for 55gal corner). I also did this to get out of the corporate game, both me and my wife have worked for big box stores and just cant stand how they treat employees.

 

[spieszak]

I was in one of a few of my really great LFS's yesterday and noted to the owner I'd rather give him my markup on dry goods than someone online. He told me that there wasn't enough profit margin for him to bother bringing most things in. When you put a $6 markup on a $20 item, people are going to balk. When you put a $90 markup on a $300 item, people aren't going to bother. But by the time you put your money out ahead of time on something that may never sell, take up store space and pay an employee to know what it is, 30% is a fair number... but not in the eyes of anyone who has google.

 

[jccaclimber]

I'm currently in the LFS camp, but that's because I actually have a couple decent LFS here in Dallas. I order from them whenever they have, or can get what I'm after, and am fortunate enough to get my livestock from them as well.

On the other hand not so long ago when I was living in Lafayette, IN, not so much. There was only one mom and pop name in town and while the manager was awesome, the owner was a nightmare. I was driven pretty hard to the online market for the following reasons:

Prices on hard goods like dechlor were X online (with shipping), X+50% at the local Xmart pet store, and X+130% at my LFS. I'm good with typical retail markup, but more than double on most items was hard to swallow. If the online place is less than your wholesale you either need to make them your wholesaler, have a stern conversation with your wholesaler, or sell a product you can be competitive on. One of the best things the LBS (bike shop) started doing was getting energy bars at the local Sams Club. They went from being priced out to selling at what had been their wholesale price, but making the same margin.

Livestock availability: I'm in to freshwater plants. I've never seen a LFS that has anything beyond the same 10-20 common plant species. The only way to get something different was to go to hobbyist forums.

Hard goods availability: I want a UVL bulb, a part for my Ecotech gadget, a DC pump, a repair part for a T5 fixture they sell in that store...every time I was told it wasn't cost effective for them to order it. I even offered to pay my online cost +20%+tax on a $200 item once and was told it wasn't worth their time to order outside their usual distributor.

Knowledge: Most LFS employees aren't nearly as good as they think they are. Neither are the rest of us, but I'm not asking you for an upcharge for my knowledge. On the rare case I do find that knowledgeable store I keep shopping there because as a result they tend to have better livestock.

Emergencies you say? If I am a regular customer and need them to move a tank or handle an emergency they're going to charge me $200/hour. If I've never been in their store in my life, buy everything online and call them up when I have an emergency....exact same rate. If I had a maintenance account with them that would make a difference, but I enjoy taking caring for my tank and would end up paying even more in monthly maintenance.

 

[mattgumaer]

On sort of a different topic, I went to a frag swap locally over the weekend at a LFS. The place was packed but most of the money changing hands was between customers and both commercial and non-commercial fraggers. The LFS was selling some stuff but not nearly as much as others. Does the LFS make money on these events or is it hoped that the swaps will generate 'repeat business' or some combination? Just curious.

Matt

 

[sixpackgarage]

Some companies say they do MAP pricing which is Minimum Advertised Price. This pricing is supposed to help protect the smaller store's.

They would definitely be lying if they say it's to protect smaller stores. MAP is a very simple mechanism to prevent products from becoming devalued. MAP is only there to try to protect the profits of the mfg. and indirectly the WD. They don't give a care about the LFS.

When I owned a shop (not LFS) years ago, I would make it a point to report every single violator of MAP that I could find.. although that was fun due to the relief of anger.. in retrospect I should have spent that energy on being even more awesome to my customers.

Either way, LFS ownership is an uphill battle just like almost every other business venture is.

 

[tc2007]

Here's another tip from a customer

Keep Betta fish and supplies. Even if you don't sell freshwater. It all started for me when my wife got a Betta for my kid. I wasn't even too interested in keeping fish. Then we visited a LFS with the coolest displays ever and I got hooked. It took me 1.5 years to convert from freshwater to salt.

Betta fish is the perfect gateway drug!

 

[Windy2]

NO! Milk is the gateway drug

 

[mhucasey]

1). Post your prices for fish and inverts at the tank that they are in. Nothing grates on me more than asking someone how much a fish or frag is and seeing them make up a price in their head. I want to decide on what is in my budget without asking multiple times.
2). My local store orders the stuff I buy online directly at the same price I would pay then has it drop shipped to my house. They collect the profit not the online retailers. Win win
3). Have escalating discounts- if I buy 3 frags instead of one there should be a discount for buying more. Discounts go a long way with the wife too
4). Be willing to frag the big colonies in the display tank, even if it's putting me on a schedule to get a frag when you trim it next.

 

[Staisman]

Very well said, but when I went on your facebook page I liked the space and color in the store but I didn't like pictures of your stock. Think why we buy corals? Because they are beautiful. By looking at the pictures you are posting I don't wanna buy anything. What I am trying to say is buy a nice camera or hire some freelancer who would make some pictures once a week.
Look at my signature and see pictures of my build with the same corals you have. I am pretty sure I would sell more with those.
Good Luck.

Bieng a new store owner we basically set out to do what the OP had posted. While our area had 3 stores that carry saltwater, it was not the main focus because they were all around pet stores that focused on dog grooming. Many had dirty tanks, sick fish, or poor selection of dry goods/equipment. We will have been open for a year this october. We decided to open because the local stores were dropping the ball on quality and the good stores were 2hrs away in atlanta (which turns into a whole day trip). We also wanted to share our hobby with many more people and lead them down the right path to having a successful saltwater aquarium.

Yes livestock is where the small shops thrive and have the best profit margin. To maximize this we QT all new fish for 2 weeks in our qt system and treat for anything we spot with proper meds before putting out for sale. All special order fish are held 1 week in qt, if the customer doesnt want to wait them they can get the fish but no garuntee. This time gives the fish time to recover from shipping and we have time to observe them.

Since we have opened we have increased our livestock display tanks to accomidate more fish, and more sizes. A lot of our customers base are first timers so not too much on new tank sales. A lot of our customers get tanks off craigslist or from reef forums. We are slowly building our market one tank at a time. Our customers have been to the other stores and even though they are new to the hobby they can tell the difference in quality. We also keep a wish/want list running of what our customers are looking for/wanting in livestock and corals. Sometimes certain items are not always available, but we call that person when we can get a hold of that item.

What irks me the most is people who shop online, instead of with me. I can get most all the name brand products if you ask. But i get people that say "oh i can get that on amazon by tomorrow ". I am here to provide more than just products, we give tons of free advice, recommendations based on our knowledge of what you already have, got an emergency, we are here amazon/etc is not.

I dont have a problem with people ordering online if you have no lfs available. I think what this hobby really needs is more support for the real LFS. This is not a hobby that scales up to large corp scale very well, we all know that from visiting any petco. If we dont support the mom and pop LFS we will end up with No great LFS.

Some companies say they do MAP pricing which is Minimum Advertised Price. This pricing is supposed to help protect the smaller store's. Well i know from first hand this isnt always the case. Marinedepot.com was selling an item for $100 less than MAP and offering free shipping. I cant even order it for what they are letting them sell it for and they have done nothing to make them correct it.

BUY LOCAL AND SUPPORT THE WORTHY FISH STORES IN YOUR AREA. If you dont see it in the store ask for it, there are so many brands/models the little stores cant carry them all in stock all the time.

Ok rant over.

Www.facebook.com/simplysaltaquatics

 

[sk8ter20art]

Very well said, but when I went on your facebook page I liked the space and color in the store but I didn't like pictures of your stock. Think why we buy corals? Because they are beautiful. By looking at the pictures you are posting I don't wanna buy anything. What I am trying to say is buy a nice camera or hire some freelancer who would make some pictures once a week.
Look at my signature and see pictures of my build with the same corals you have. I am pretty sure I would sell more with those.
Good Luck.

Thanks, yeah many photos we post are quick shots of new arrivals. Most of our current customers are new to the hobby locals and if they see something they are interested in they usually just swing by. I work 80+ hrs a week between my shop and my other job that pays the bills at home, so i dont have a lot of time for true photo shoots.

We are still expanding and growing as a store just setup a 200gal growout system with metal halides. We also needed more space for corals.

 

[dlondono]

Most brick & mortar businesses require location determined by real traffic study.

After location capital is required, true capital will see a small business survive the first 5. Most start with limited capital.

Fish stores have limited market
General pet store has more diversed market

Brick and mortar and or home based fail due to lack of patience, lack of capital, inadequate planning of other critical specs.

Fish stores are not the only low margin businesses.
Supermarkets
Gas stations
Fast food chains
Etc

The trick is setting it up right and once you do expand into multiple locations.

Easier said than done but in low margin businesses volume and multiple locations is the model that works, the model that has most owners living very well.

I have never met any Dunkin Donuts owner that only has one coffee shop....